HILLARY CLINTON’S most effective quip, in her long struggle with Barack Obama for the Democratic nomination last year, was that the Oval Office is no place for on-the-job training. It went to the heart of the nagging worry about the silver-tongued young senator from Illinois: that he lacked even the slightest executive experience, and that in his brief career he had never really stood up to powerful interests, whether in his home city of Chicago or in the wider world. Might Mrs Clinton have been right about her foe?

snip...

But at home Mr Obama has had a difficult start. His performance has been weaker than those who endorsed his candidacy, including this newspaper, had hoped. Many of his strongest supporters—liberal columnists, prominent donors, Democratic Party stalwarts—have started to question him. As for those not so beholden, polls show that independent voters again prefer Republicans to Democrats, a startling reversal of fortune in just a few weeks. Mr Obama’s once-celestial approval ratings are about where George Bush’s were at this stage in his awful presidency. Despite his resounding electoral victory, his solid majorities in both chambers of Congress and the obvious goodwill of the bulk of the electorate, Mr Obama has seemed curiously feeble.

Who would have thunk it? Only all those parochial, conservative red necks out here screaming "He's an idiot!"

A robbery at a Burger King in Miami's Upper East Side neighborhood left one person dead and another seriously injured.

A true tragedy but the article underscores the media bias all the way through.

Why?

Because the person dead is the robber and the guy seriously injured is a concealed carry permit holder. The writer does a great job in trying to suggest that the concealed carry holder instigated the whole thing during a crowded time when lot's of children were around.

But humor me none the less.

Who do you think the robber voted for this past November? The Maverick or The Messiah?

Who do you think the concealed carry customer voted for? The Maverick or the Messiah?

In Oakland, CA, about sixty people show up at a rally for a man who's only sin was to rape a girl and kill four cops...........

Many law enforcement officials are openly expressing dismay that the public held a rally for gunman Lovelle Mixon in Oakland.

KRON 4’s Mark Jones spoke to Alameda County Sergeant J.D. Nelson who is outraged, “I just don’t understand how people in the community can support an individual, a criminal, who was a carjacker, who raped a 12-year-old and murdered four people. How people can rally behind him, I think it’s terrible, just terrible. Our hearts go out to the Oakland police department and to have people rally for that person who is responsible for their murder is disgusting.”

On Saturday Mixon opened fire on two officers during what appeared to be a routine traffic stop, leading to a gun fight in which two more officers died before police killed him.

Nelson also told Mark that when Mixon is mentioned, he only thinks of the victims, “The only thing that I will ever think about him for is the many numerous families and lives that he ruined. That’s what I’ll be thinking of when I think of him. What about the 12-year-old girl, how is she supposed to overcome all this? And the other victims he may have raped. And the carjacking victim in San Francisco, he has affected all those people.”

On Friday, just a day before the shooting, Oakland PD learned that DNA evidence had tentatively linked Mixon to the February rape of a 12-year-old girl.

The event, organized by the International People’s Democratic Uhuru Movement, started at 6 p.m. Wednesday at the Uhuru House on 7911 MacArthur Boulevard.

Obama is putting the US on the fast track to look like California. And we know just how well that state's running right now.

Some of President Obama’s critics say he wants to turn America toward European-style socialism but maybe he’ll settle for imitating California.

California, once known for its robust capitalism, growth and sunny optimism (after all, it’s the state that brought us Ronald Reagan), has become a pitiful giant, pinned down by the same kind of big government that Obama envisions for the country.

Obama has struck a deal with Crown Publishing Group to write a book after his term ends. If he succeeds in making America resemble California, perhaps Obama will title it “Dreams From California.”

California is virtually bankrupt after years of out-of-control state government spending (it leads the country in spending on government employees) and is begging for a federal bailout. Its extreme “green” environmentalism and health care costs (it keeps flirting with universal health care) are among the reasons that its economy is crippled. It has the nation’s fourth highest unemployment rate, ranks 48 out of 50 states in K-12 education (even though it spends twice the national average on education), and is swamped by illegal immigrant families overwhelming its social services and welfare system.

Fortune magazine points out that in California…

“In the past year more people have lost jobs . . . than in any other state. More homes have gone into foreclosure. More banks have failed . . . businesses are moving out at an alarming rate, most often citing excessive regulation and intolerable taxes. For top earners, California’s taxes are the highest in the U.S. And to what end? California’s credit rating is the lowest in the nation.”

“California here we come” has become “California here we go.” Last year, 144,000 more people decamped from California than entered it. — That’s the worst out-migration in the nation! A few reasons:

- According to The Milken Institute, California is the costliest place in America to do business

- It has the second highest tax rates in the country

- It is a trial lawyer’s paradise where there may be more nuisance suits than bathing suits.

They called it paradiseThe place to beThey watched the hazy sun Sinking in the sea........

The state of California near bankruptcy. The state is issuing IOU's for state tax refunds because they can't afford to pay them.

But at least they have their priorities straight..........

The California legislature is considering regulating the color of cars and reflectivity of paint to reduce the energy requirements to cool them. A presentation on the proposed legislation by the California Air Resources Board is below.

The problem isn't the color per se, but the reflectivity of the paint overall. And dark colors just don't reflect well, so they are likely out. "Jet black remains an issue," says the report.

Anyone who's ever entered a very hot car knows that it can be cooled down immediately by driving a few feet with the windows open, effectively neutralizing any color-caused heat issues before engaging the air conditioner. But whatever, black is evil.

The new regulations would be phased in beginning in 2012, so if you want that black car, you better buy it soon. More on Autoblog and CrunchGear.

Thursday, March 26, 2009

Women still have a complex and contradictory relationship with their own image according to a poll released on Tuesday that found 25 percent of those questioned would rather win America's Next Top Model TV show than the Nobel Peace Prize.

And although 75 percent of women surveyed said they'd be willing to shave their heads to save the life of a stranger, more than a quarter of those taking part admitted they would make their best friend fat for life, if it meant they could be thin.

As for that age-old dilemma of whether to marry for wealth or looks, half of the 18- to 24-year-olds questioned said they would marry an ugly man if he were a multimillionaire.

An inmate's attempt to heat up sausages in his toilet went up in smoke when the cooking fire forced a unit evacuation at a Washington prison. Clallam Bay Corrections Center spokeswoman

Denise Larson says 130 inmates were evacuated to a dining hall when smoke was spotted coming from a sewer vent pipe Wednesday evening.

She says the smoke was traced to the inmate's cell and he admitted to trying to heat up snack sausage bought from a prison store in the stainless steel toilet. The inmate's identity has not been released.

The toilet chef has been placed in segregation pending discipline at the prison on Washington's Olympic Peninsula.

Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.

One of those allegedly asleep-at-the-switch board members was Chicago's Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.

As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation's mortgage woes and fulfilling the administration's pledge to impose responsibility on the financial world.

Emanuel's Freddie Mac involvement has been a prominent point on his political résumé, and his healthy payday from the firm has been no secret either. What is less known, however, is how little he apparently did for his money and how he benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation's current economic mess.

We used to call this looting the Treasury. Now we just call it the democratic politics as usual.

Now that the bailout now has everyone at the trough. Even the big ole fat asses (aka good, profitable businesses) get to eat.....

Cincinnati wants to keep Graeter's employees - and gain more - so much that it might loan the company up to $10 million to build a manufacturing facility in Bond Hill.

If City Council approves the terms suggested by City Manager Milton Dohoney, the city would sell the 4.4-acre property at Paddock Road and 66th Street for $1. The company plans to build a 28,000-square-foot plant there to help it take its ice cream nationwide.

Graeter's officials say the new plant would help them retain 68 workers and hire 30 more within five years. The city asks that the company, founded in 1870, try to hire city residents for at least 75 percent of those new jobs.

Mayor Mark Mallory pointed out that the deal, if approved, would make money for the city. Graeter's would pay 2 percent interest the first two years, then 4 percent the remaining 18 years of the 20-year loan.

Now think about this. Let's say ole Gordon here wanted to open up an ice cream factory. Do you think Cincinnati is going to help me out with 10 million to get it done?

Yet, as a resident, I 'm supposed to fork out city income tax to help an already existing business who makes thousands of times more dollars than I do.

For those in the world who think the socialization of the economy is the way to go, have them look at this. The USPS is a guaranteed monopoly that, like the federal government itself is allowed to go into open-ended debt. Yet, service is poor and often unreliable. When they aren't gunning down innocent people, post office personnel otherwise look at customers as a hinderance to their day. As a private business, the USPS would have gone out of business 20 years ago. But the federal government has made it illegal for them to go out of business. And still they are losing billions and laying off thousands. What will be the answer? 10 to 1 odds it will involve a taxpayer bailout funded in part by tax on profits from USPS competitors, UPS and FedEx. Then they will raise the price of a stamp for good measure. Exactly the opposite of what happens in the private sector, where the prices are lower, service is better and faster, and your package arrives on time or you can freely take your business elsewhere.

Think of the USPS as a laboratory of socialism. The same article will be written about the Universal US Health Care Service in 10 years.

Chicagoans are so frustrated with broken parking meters and high costs, some are vandalizing the meters.

They are taking more of your quarters every day. And Chicagoans are in revolt. While some are saying enough by avoiding them, others are taking out their frustrations on the parking meters - literally! CBS 2 Chief Correspondent Jay Levine reports with the anger behind the new meter rate increases.

Near Broadway and Addison, meter after meter are broken.

"I called the company and I said I don't want a ticket," one woman said.

George Will with a great piece on the ding dongs and derelicts in congress who voted for the AIG tax.....

With the braying of 328 yahoos -- members of the House of Representatives who voted for retroactive and punitive use of the tax code to confiscate the legal earnings of a small, unpopular group -- still reverberating, the Obama administration yesterday invited private-sector investors to become business partners with the capricious and increasingly anti-constitutional government. This latest plan to unfreeze the financial system came almost half a year after Congress shoveled $700 billion into the Troubled Assets Relief Program, $325 billion of which has been spent without purchasing any toxic assets.

TARP funds have, however, semi-purchased, among many other things, two automobile companies (and, last week, some of their parts suppliers), which must amaze Sweden. That unlikely tutor of America regarding capitalist common sense has said, through a Cabinet minister, that the ailing Saab automobile company is on its own: "The Swedish state is not prepared to own car factories."

Another embarrassing auditor of American misgovernment is China, whose premier has rightly noted the unsustainable trajectory of America's high-consumption, low-savings economy. He has also decorously but clearly expressed sensible fears that his country's $1 trillion-plus of dollar-denominated assets might be devalued by America choosing, as banana republics have done, to use inflation for partial repudiation of improvidently incurred debts.

From Mexico, America is receiving needed instruction about fundamental rights and the rule of law. A leading Democrat trying to abolish the right of workers to secret ballots in unionization elections is California's Rep. George Miller who, with 15 other Democrats, in 2001 admonished Mexico: "The secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose." Last year, Mexico's highest court unanimously affirmed for Mexicans the right that Democrats want to strip from Americans.

Congress, with the approval of a president who has waxed censorious about his predecessor's imperious unilateralism in dealing with other nations, has shredded the North American Free Trade Agreement. Congress used the omnibus spending bill to abolish a program that was created as part of a protracted U.S. stall regarding compliance with its obligation to allow Mexican long-haul trucks on U.S. roads. The program, testing the safety of Mexican trucking, became an embarrassment because it found Mexican trucking at least as safe as U.S. trucking. Mexico has resorted to protectionism -- tariffs on many U.S. goods -- in retaliation for Democrats' protection of the Teamsters union.

1) The sun will rise tomorrow2) I will eventually die3) Whenever the feds "simplify" the tax code, my business sky rockets.

President Barack Obama is putting former Federal Reserve Chairman Paul Volcker in charge of a tax- code review aimed at closing loopholes, streamlining the law and generating revenue, budget Director Peter Orszag said.

Volcker, 81, who heads the president’s Economic Recovery Advisory Board, is being asked to take a look at the laws in an effort to rebalance the tax system.

Orszag said the review, given a deadline of Dec. 4, is being ordered to make recommendations on steps to simplify the code, built over the last 96 years, in ways that would reduce tax evasion and what he called “corporate welfare.”

“There are hundreds of billions of dollars in uncollected taxes each year,” Orszag said in a conference call. The Volcker board “will be examining ways of being even more aggressive on reducing the tax gap.”

The tax gap is the difference between the amount of taxes owed by taxpayers and companies and the amount collected. Orszag cited academic studies suggesting that the difference is $300 billion or more. That is “ a lot of money,” he said, adding that the administration is going to be “as aggressive as possible” in reducing it.

Obama made a tax overhaul part of his platform during the presidential campaign. One goal is to close loopholes that he said reward companies that move jobs overseas.

First, this journalist is part of what is wrong with our democracy. There is nothing written in the tax code as a specific loophole to move jobs overseas.

I'll give you an example of how and why companies move jobs overseas.

Assume I own American company XYZ, incorporated. Now let's say I make widgets that I sell overseas from my plant in Detroit.

An absolute must read piece in the NY Times by an AIG EVP, who resigned over all this dust up over bonuses..........

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

Everyone knows that Barack Obama is lost without his teleprompter, but his latest blunder, courtesy of the Milwaukee Journal Sentinel, via the Corner, suggests that the teleprompter may not be enough unless it includes phonetic spellings. Obama was speaking at a White House roundtable on clean energy systems, and repeatedly saluted Orion Energy Systems, whose CEO, Neal Verfuerth, was present at the event. So Obama referred to "Orion" a number of times. Only problem was, he appeared to be unfamiliar with the word:

All terrific press for Orion, except that Obama kept pronouncing the company's name wrong, calling it OAR-ee-on.

Unbelievable. Orion is one of the best-known constellations, mostly because it actually looks like its namesake. So evidently we have to add astronomy to history and economics as subjects of which Obama is remarkably ignorant. I'm beginning to fear that our President has below-average knowledge of the world. Not for a President, but for a middle-aged American.

Monday, March 23, 2009

No wonder Senator Christopher Dodd (D-Conn) went wobbly last week when asked about his February amendment ratifying hundreds of millions of dollars in bonuses to executives at insurance giant AIG. Dodd has been one of the company's favorite recipients of campaign contributions. But it turns out that Senator Dodd's wife has also benefited from past connections to AIG as well.

From 2001-2004, Jackie Clegg Dodd served as an "outside" director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG - giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)

Congressman Norm Dicks has never been shy about accepting campaign donations from favor seekers.

Now the FBI is investigating one of Dicks' most generous donors — the powerhouse lobbying firm PMA Group.

Questions have been raised about whether some PMA-related campaign contributions were actually given by the people listed as donors. For example, thousands of dollars in contributions to Dicks, Washington Sen. Patty Murray and other lawmakers came from a sommelier and a golf-club employee who were identified as PMA officials on some campaign-finance reports. The investigation has prompted some lawmakers to distance themselves from the PMA-related contributions. Murray said she has donated $3,500 of her questionable contributions to Food Lifeline, a local charity. Other lawmakers have talked about doing something similar.

Dicks is waiting to see if the FBI finds any criminal wrongdoing before making a decision on his contributions. "If any of those contributions are judged improper, it'd be his intention to give them back," said Dicks' spokesperson George Behan.

The FBI raided PMA's office suite in Arlington, Va., last November, part of an investigation into possible improper campaign donations, according to media reports.

If you want to guarantee that America becomes a mediocre nation, then just keep vilifying every public figure struggling to find a way out of this crisis who stumbles once — like Treasury Secretary Timothy Geithner or A.I.G.’s $1-a-year fill-in C.E.O., Ed Liddy — and you’ll ensure that no capable person enlists in government. You will ensure that every bank that has taken public money will try to get rid of it as fast it can, so as not to come under scrutiny, even though that would weaken their balance sheets and make them less able to lend money. And you will ensure that we’ll never get out of this banking crisis, because the solution depends on getting private money funds to team up with the government to buy up toxic assets — and fund managers are growing terrified of any collaboration with government.

President Obama missed a huge teaching opportunity with A.I.G. Those bonuses were an outrage. The public’s anger was justified. But rather than fanning those flames and letting Congress run riot, the president should have said: “I’ll handle this.”

He should have gone on national TV and had the fireside chat with the country that is long overdue. That’s a talk where he lays out exactly how deep the crisis we are in is, exactly how much sacrifice we’re all going to have to make to get out of it, and then calls on those A.I.G. brokers — and everyone else who, in our rush to heal our banking system, may have gotten bonuses they did not deserve — and tells them that their president is asking them to return their bonuses “for the sake of the country.”

Had Mr. Obama given A.I.G.’s American brokers a reputation to live up to, a great national mission to join, I’d bet anything we’d have gotten most of our money back voluntarily. Inspiring conduct has so much more of an impact than coercing it. And it would have elevated the president to where he belongs — above the angry gaggle in Congress.

Incredibly, Democrats on Capitol Hill are, with White House encouragement, talking about jamming health care through Congress with a special procedure that requires only 50 Senate votes.

At least after World War II, spending could, and did, decline rapidly when the country demobilized. In this case, with the bulk of federal spending geared toward income maintenance and transfer payments that have political constituencies, that won't happen. And that is part of Mr. Obama's plan. One unstated but clearly implicit goal of his budget is to put in place spending programs that make ever-more Americans dependent on government and that will require a permanently higher level of taxation to finance. All of this is being done in the name of addressing income inequality.

Republicans have an obligation to slow down this express train to a European welfare state, and to educate Americans so that they put pressure on Democrats who claim to be deficit hawks. If this budget passes in anything close to Mr. Obama's form, Republicans will spend the next two or three generations doing little more than collecting higher taxes from the middle class to finance the Obama revolution.

"...the various steps Barack Obama is taking with respect to the armed forces, the foreign battlefields in which they are engaged, our allies as well as our adversaries will not only diminish our power. They will encourage our enemies to perceive us as less powerful – with ominous implications. Consider some illustrative examples:

The Obama administration is cutting the defense budget by 10%. The result will be to preclude much, if not virtually all, of the modernization that will be required to prepare the U.S. military to contend with tomorrow’s wars. Most of what the Pentagon spends goes to fixed – and growing – personnel-related costs (pay, bonuses, health care, etc.) and operations. As a result, at Obama funding levels, there will not be much available even to “reset” today’s forces by refurbishing the equipment they have been using up in present conflicts.

The President is on a path to denuclearizing the United States by refusing to modernize the arsenal or even to fund fully the steps necessary to assure the viability of the weapons we have. He hopes to dress up this act of unilateral disarmament by seeking to resume arms control negotiations with Russia, as though such throw-backs to the old Cold War and its bipolar power structure apply today – let alone that there are grounds for believing the Kremlin will adhere to new treaties any better than the previous ones it systematically violated. "

Every fascist regime begins with assigning blame to every society woe to a scape goat.

The current democrats in this country have found one; they're called the rich.

This is nuts. I mean, really folks ... we have gone bat-guano insane over this AIG bonus brouhaha. You're being manipulated. The wealth-envy is being stoked. What we have here is a phony outrage wholly generated by the political class to take the minds of the dumb masses (if you're reading aloud, do so slowly) off of the spectacularly irresponsible bailout, stimulus and budget bills that have been passed in recent months. We have an anti-capitalist Democrat party working with a president who thinks that America's greatness is based in government, together with no small number of Republican sycophants, spending this country into oblivion ... and looking for ways to distract your attention in the process.

NO ... I'm not saying that the AIG employees who got these bonuses necessarily earned them. I'm still waiting to meet the man who actually earned every dollar and benefit he has received from his employer. We call him Sully. The Financial Services Division of AIG is a basket case. The fact is, though, AIG had a contractual obligation to pay those bonuses, and failure to do so would have been actionable. A good trial attorney would manage to get double the amount due plus fees. All of the wealth envy and moaning about the evil, disgusting, putrid, worthless rich won't make those contracts void. The decision to pay those bonuses pursuant to the legally enforceable contracts was the right one.

More disgusting than the bonuses, however, is the political reaction to them. If ever there was a time for pitchforks and torches -- this should have been it. Not because of the AIG bonuses ... but because of what transpired in the Congress last week. For the first time that I can remember the Imperial Congress of the United States has passed a law establishing a confiscatory tax to be levied on certain individuals -- not for the purpose of raising revenue -- but strictly for the purpose of punishment. The political class has determined, without the benefit of due process or a trial, that the actions of the AIG employees in accepting these bonuses was a crime, and that crime shall be punished by seizure of the money. Legislation to single out and punish someone without due process is constitutionally forbidden. But who cares? What does the Constitution mean any more anyway?

Obama could have shown great leadership to stand up against the congressional idiots who passed this tax; to rail against protesters lining up at the doors of AIG employees; to stand up and refute the notion that all of our woes our due the rich in this country. Instead, he's decided to vote present.

College kids and celebrities are often very liberal. Can you explain why you think that is?

Sure. In order to hold onto the belief that nothing is better than anything else, you have to remove yourself or have been removed from the consequences of your beliefs. Because once you went to the real world, you recognize some things are right, some things are wrong.

...One of the lines I like to use is that stupidity is a luxury. And when you're young and you're on the college campuses and you don't have a job, you're not paying taxes. You're not starting a business. You don't have to worry about environmental policies that are ridiculous.

You're living on these college campuses where no matter how much you binge drink, no matter how much you projectile vomit, no matter how much you go wild for the cameras in Cancun and strip naked, the next day you wake up on a campus with lush manicured lawns. You wake up in an ivy covered two room mansion. You wake up and somebody else has bought your food, cooked your food, serves you your food, and when you're finished, cleans your dishes for you.

A CHARMING visit with Jay Leno won’t fix it. A 90 percent tax on bankers’ bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until Barack Obama addresses the full depth of Americans’ anger with his full arsenal of policy smarts and political gifts, his presidency and, worse, our economy will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning delivered by Paulette Altmaier of Cupertino, Calif., in a letter to the editor published by The Times last week: “President Obama may not realize it yet, but his Katrina moment has arrived.”

Six weeks ago I wrote in this space that the country’s surge of populist rage could devour the president’s best-laid plans, including the essential Act II of the bank rescue, if he didn’t get in front of it. The occasion then was the Tom Daschle firestorm. The White House seemed utterly blindsided by the public’s revulsion at the moneyedinsiders’ culture illuminated by Daschle’s post-Senate career. Yet last week’s events suggest that the administration learned nothing from that brush with disaster.

Otherwise it never would have used Lawrence Summers, the chief economic adviser, as a messenger just as the A.I.G. rage was reaching a full boil last weekend. Summers is so tone-deaf that he makes Geithner seem like Bobby Kennedy.

Bob Schieffer of CBS asked Summers the simple question that has haunted the American public since the bailouts began last fall: “Do you know, Dr. Summers, what the banks have done with all of this money that has been funneled to them through these bailouts?” What followed was a monologue of evasion that, translated into English, amounted to: Not really, but you little folk needn’t worry about it.

The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad — I mean misunderstood — assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding.

But it’s immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem.